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Budget Promises Spur Fears of Cuts

By German Lopez · February 5th, 2014 · Commentary
commentary 2014-02-05

A new controversy seems to brewing in City Hall. As budget promises begin to pile up, local officials and media are starting to ask the big question: What is going to get cut?

The concern comes as local leaders set two seemingly contradictory budget paths, with a collision increasingly appearing inevitable.

On one path, Mayor John Cranley says he wants to structurally balance the budget this year to help prevent a downgrade in the city’s bond rating. To do so, Cranley would need to pass a budget with $20.4 million in cuts, according to an analysis of the city administration’s numbers.

On the other path, city officials love making new promises. The mayor flaunted two such promises in the past week: On Feb. 3, Cranley unveiled a $5.6 million police plan that would increase overtime pay and add more cops to the city’s payroll to help implement a gang unit, hot spot policing and more youth outreach. On Jan. 30, Cranley also reiterated his support for his $2.3 million Hand Up Initiative that would attempt to put the long-term unemployed back to work through new job training and part-time work opportunities.

With those initiatives counted, the city actually needs to cut $28.3 million to get to a structurally balanced budget.

Therein lies the problem. While the mayor pursues a structurally balanced budget, he also promises a costly agenda that will make the task of structural balance all the more difficult.

None of this is to criticize the specifics of the mayor’s proposals. The Hand Up Initiative could tackle a long-term unemployment issue that continues holding down the national economy. And the police plan pursues study-backed initiatives, particularly hot spot policing, that could help prevent future homicides and violent crime.

Still, the reality is that something will have to give in the budget to pay for the new initiatives.

When CityBeat asked Cranley about his approach to the budget, he said his priorities lie in police, firefighters, parks and recreation, basic public services like trash collection, roads and health and human services. 

By his calculation, the priorities make up roughly $300 million of the operating budget.

The remaining $70 million or so can be cut to match incoming revenues.

Within the remaining $70-plus million, three candidates for cuts are the city’s Law Department, Department of Planning and Buildings, and Office of Environmental Quality. Depending on Cranley’s proposal, the agencies could be outsourced to (“shared with”) the county or outright eliminated.

While slashing the agencies could temporarily alleviate the strained budget, some council members rightly point out that the eliminations could reduce available tax revenues in the long-term.

For example, the Office of Environmental Quality regularly takes up initiatives, such as installing more solar panels across the city, that cost a lot upfront but save money on energy costs in the long run. Those long-term investments would be lost if the agency that handles them were eliminated.

Similarly, the Law Department and Department of Planning and Buildings regularly handle deals, reviews and projects that bring in more businesses and, subsequently, tax revenues. It’s doubtful all those deals, reviews and projects would be lost if the two agencies were outsourced or eliminated, but reducing the departments’ citywide capacity would certainly hinder such efforts.

The potential for lost long-term revenue helps explain why some council members worry the potential cuts could do more harm than good. Shortly after Cranley announced his police plan, Councilman Chris Seelbach took to Facebook to praise the proposal, but he cautioned against cutting or outsourcing entire city departments to balance the budget. Seelbach also stated doubts that a Democratic majority would go along with department-wide cuts.

In other words, the potential fixes to local budget woes are facing resistance even before the mayor makes his official proposal.

And the three agencies add up to only part of what Cranley and council need to cut. In the previous city budget, the city administration put the Law Department’s budget at $6.8 million, the Department of Planning and Buildings’ budget at $6.7 million and the Office of Environmental Quality’s budget at $3.5 million. If $17 million proves difficult, how can Cranley expect to fully close the required $28.3 million in one year?

Going by the recent trend of local political battles, it looks like the answer to that question could produce another contentious debate at City Hall.



CONTACT GERMAN LOPEZ: glopez@citybeat.com or @germanrlopez


 
 
 
 

 

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